Stripping the public of its constitutional protections, against wrong doing.
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The worst and most insidious problems with this law are what you will not find.

The equivalent of a bank leaving the doors open and the vault unlocked. Creating a funding program and failing to include key features used in all civilized governments to protect against and catch wrong doing. Failing to include critical guidelines, definitions, limitations and restrictions. Allowing the abusers to claim there was nothing in the law that prevented virtually any scheme devised.

Difficult recognize because the reader has to consider every possibility then evaluate the law to see if each possibility was covered. If not it is loophole! On the other hand those behind a scheme know what to look for.

  • The act was void of:
    • failed to provide restrictions as to what the Venture Capital Companies can do or not do.
    • failed to provide limitations.
    • failed to provide guidance.
    • failed to provide benchmarks.
    • failed to provide accountability.
    • failed to provide transparency.
    • failed to provide requirements to perform due diligence.

  • No assigned responsibility to any state officials to monitor and manage the program. Some automatic administrative processing responsibilities were assigned to the Oklahoma Tax Commission, to issue a determination letter to be submitted with tax returns taking the credits. Yet there is no clearly defined responsibility or accountability assigned to insure the venture meets requirments for the tax credits.

  • The law does specifically restricted punishment to any who violate the law to, simply not being allowed to participate in future programs.

  • The 2006 admendment eliminated all requirements that any who violate the law be required to return the ill-gotten money.

  • Yet the act has lengthy and detailed specifications of criminal violation and punishment for any who disclose the identities of any person or businesses benefiting from the tax credits or how much money is taken from the state.
  • Note: State lawmakers provided as much protection as they possibly could, but they could not protect some participating in the tax credits from certain federal reporting requirements.

    • Void of clearly stated performance measures without a standard by which to measure success or failure.
    • No one is tracking performance measures such as how many jobs were created.
      • Sections 21

        SECTION 21. NEW LAW......Snip....

        3. The qualified rural small business capital company shall not make a qualified investment in an Oklahoma small business venture in which it has, at any time, more than fifty percent (50%) ownership ......Snip....

        B. The Oklahoma Tax Commission shall have the authority (Ed: but no responsibility) to make an independent determination that any proposed use of monies, assets, funds or other things of value which are to be used for purposes of claiming any credits ... are for a legitimate business purpose of the Oklahoma rural small business venture and not for the primary purpose of obtaining the tax credits authorized by such sections on the basis of activity which does not have substantial economic profit-based potential.

        C. The Tax Commission shall be authorized to recapture the credits .... if it finds that the transaction does not meet the requirements of the Small Business Capital Formation Incentive Act...Snip....

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